Question

Excavators, Inc. (“EI”) agreed to dig a foundation for Ralph’s barn for $7000. EI will be entitled to additional compensation in which situation?

EI misjudged how long it would take to do the job, and billed Ralph for three hours’ additional time

EI discovered very significant underground water flow which had to be addressed, and it billed Ralph for doing so

EI discovered the backhoe it planned to use on the job required $600 in service work, and added that amount to the bill

EI complained that there were no available bathrooms for its crew to use—they had to drive eight miles to a quick-mart store—and EI billed Ralph for this time

Answer 1

Excavators, Inc. would only be entitled to an additional compensation in the second case where they discovered a significant underground water flow which had to be addressed in order to successfully lay the foundation for Ralphs barn.

This is true as under the original agreement, Excavators, Inc would not have any prior knowledge about the underground water flow due to which they agreed to a compensation for $7000. After the discovery of a new parameter which was not known to them initially before or during the agreement, they can claim a violation of their agreement. Thus they would be entitled to an additional compensation by Ralph.